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Status Key On-Target At-Risk Off-Target Pending Refresh Data Not Available Under Development

EPR Fourth Quarter Report: Strategic Measures Summary Dashboard

The CalPERS 2017-22 Strategic Plan encompasses 34 Strategic Measures (Measures) that enable us to track our progress towards achieving our strategic goals and objectives. The Strategic Measures Summary Dashboard provides a brief synopsis of how all 34 Measures are performing for the fourth quarter (April 1, 2019 – June 30, 2019). Additional performance details can be found on the summary sheets for each Measure.

Fourth Quarter Measure Performance:

• 10 On-Target• 2 At-Risk• 1 Off-Target• 16 Pending refresh• 4 Under development• 1 Closed Session item

The Strategic Measures Summary Dashboard also provides trend analysis data that captures performance from year one (FY 2017-18).

Agenda Item 10b - Attachment C - 1 of 66

Enterprise Performance Reporting – Fourth Quarter Status CalPERS 2018-19 Strategic Measures

Fund Sustainability Q1 Status Q2 Status Q3 Status Q4 Status Trend

Analysis (FY2017-18)

Page Number

Funded Status Q1|Q2|Q3|Q4

13

Projected Funded Status Q1|Q2|Q3|Q4

15

1-year total expected fund volatility

Q1|Q2|Q3|Q4 17

Annualized (5-year) excess investment returns relative to Total Fund policy benchmark

Q1|Q2|Q3|Q4

18

Stakeholder assessment survey – risk

Q1|Q2|Q3|Q4

20

Investment managers policies and procedures for ESG factor integration

Q1|Q2|Q3|Q4

22



Health Care Affordability Q1 Status Q2 Status Q3 Status Q4 Status Trend


Page Number

Access to care

Q1|Q2|Q3|Q4 24

Total health care cost annual change

Q1|Q2|Q3|Q4 26

Diabetes self-management

Q1|Q2|Q3|Q4 7

Mental health and well being

Q1|Q2|Q3|Q4 9

Self-reported overall health status

Q1|Q2|Q3|Q4 28

Opioids – dose

Q1|Q2|Q3|Q4 30

Opioids – duration

Q1|Q2|Q3|Q4 32

C-section rate

Q1|Q2|Q3|Q4 34

Acute onset lower back pain and related opioid use

N/A 36

Acute onset lower back pain and physcial therapy

N/A 37

Overuse of imaging for back pain N/A 38



Reduce Complexity Q1 Status Q2 Status Q3 Status Q4 Status Trend


Page Number

CEM – pension complexity score

Q1|Q2|Q3|Q4 40

External investment manager reduction strategy

Q1|Q2|Q3|Q4

42

CEM – information technology capability score

Q1|Q2|Q3|Q4

44

CEM – cost per member

Q1|Q2|Q3|Q4 11

Overhead operational cost

Q1|Q2|Q3|Q4

46

5-year net value added

Q1|Q2|Q3|Q4 47



Risk Management Q1 Status Q2 Status Q3 Status Q4 Status Trend


Page Number

Stakeholder assesment survey – compliance and risk

Q1|Q2|Q3|Q4

48

Risk employee awareness survey

Q1|Q2|Q3|Q4 50

Risk program maturity assessment

Q1|Q2|Q3|Q4 52

Compliance employee awareness survey

Q1|Q2|Q3|Q4

54

Compliance program maturity assessment

Q1|Q2|Q3|Q4

56

Composite security health score within range

Closed Session

Closed Session

Closed Session

Closed Session

N/A 58



Talent Management Q1 Status Q2 Status Q3 Status Q4 Status Trend


Page Number

Effectiveness of outreach activities N/A 59

Engagement survey results & action items – diversity & inclusion

Q1|Q2|Q3|Q4 60

Engagement survey results and action items – accountability N/A 62

Engagement survey results and action items – senior and executive management relationships

N/A 64

Proficiency in CalPERS leadership competencies

Q1|Q2|Q3|Q4 66


2018-19 Strategic Measure Summary (Quarter 4)

Measure Title: Diabetes Self-Management Executive Owner: Liana Bailey-Crimmins Strategic Goal: Health Care Affordability Strategic Objective: Improve the health status of our employees, members and their families, and the

communities where they live Associated Initiative(s): Population health alignment with Let’s Get Healthy California taskforce report

dashboard

Status: At-Risk Numeric Status: 51.3% (covering experience in 2018)

Description: This measure assesses the proportion of diabetics who report that they check their blood glucose or sugar at least once a day.

This metric represents the percentage of CalPERS members with diabetes who indicated that they check their blood for glucose or sugar at least once a day, based on the Annual Health Plan Member survey. A higher percentage is considered good.

Factors that can influence this measure include: • Provider and member behavior. • Enforcement of contractual requirements and collaborative efforts with CalPERS

health plan partners. For example, many health plans have disease management programs through which members receive advice and coaching on diabetes by telephone.

Measure trend: • 64.1% (covering experience in 2016) • 60.1% (covering experience in 2017)

Baseline: 67.3% (covering experience in 2015)

Target: 70%

Refresh Frequency: Annually, June

Reporting Range: January 2018 – December 2018

Thresholds: On-Target: 60% and above At-Risk: 50-59.99% Off-Target: Below 50%

Status Narrative: As of June 2019, this measure was At-Risk: 51.3% of CalPERS members with diabetes indicated that they check their blood for glucose or sugar at least once daily during 2018, based on the Annual Health Plan Member survey. The number of respondents for this question decreased from the previous year and a sampling error


may have contributed to the result (e.g. the actual population who responded may not reflect the entire population of CalPERS members with diabetes). Furthermore, the measure may underestimate glucose self-monitoring adherence because the recommended frequency of glucose self-monitoring is based on the individual member’s clinical condition. For example, people with type 2 diabetes who have optimal diabetes control for an extended period likely do not require daily self-monitoring of blood glucose. We will continue to work with our health plan partners and third-party administrators to improve diabetes self-monitoring through disease management programs, member education and outreach. Updated performance data will be available in June 2020.

Performance Trend Chart:

67.3

51.3

64.1

60.1

20

25

30

35

40

45

50

55

60

65

70

2015 2016 2017 2018

% of members who check their glucose levels at least once a day

Diabetes Self-Management

Baseline At-Risk On-Target Target Trendline



Measure Title: Mental Health and Well Being Executive Owner: Liana Bailey-Crimmins Strategic Goal: Health Care Affordability Strategic Objective: Improve the health status of our employees, members and their families, and the


dashboard

Status: At-Risk Numeric Status: 65.8% (covering member experience in 2018)

Description: Percentage of CalPERS members who answered “Usually” or “Always” to the Health Plan Member Survey (HPMS) question “In the last 12 months, how often was it easy to get the treatment or counseling you needed through your health plan?”

CalPERS team members chose to focus on the above-mentioned measure because health plans can influence access to care and because CalPERS data are readily available. CalPERS data on major depressive episodes in people with depression (a Let’s Get Healthy California measure) are unavailable. Access to mental health services can impact a variety of mental illnesses, such as depression, schizophrenia, bipolar disorder, Attention Deficit Hyperactivity Disorder (ADHD), Post Traumatic Stress Disorder (PTSD), anorexia, and bulimia.

Baseline: 72.2% (covering member experience in 2016)

Target: 80%. There are no known standardization benchmarks for the question; therefore, this target was chosen with the objective to exceed current and past (63.1% in 2016 and 71.1% in 2015) results. The lower threshold was chosen at 10% less than the target.

Refresh Frequency: Annually, June, beginning June 2019



Status Narrative: No 2018 data covering member experience in 2017 were available. As of June 2019, this measure was At-Risk: 65.8% of CalPERS members indicated that it was “Usually” or “Always” easy to get treatment of counseling in 2018. There are no national results or benchmarks published for this survey question. In addition, the question can only be answered by those who state they needed treatment or counseling for “a personal or family problem,” which is vague. CalPERS requires mental/behavioral health benefits for members; however, counseling for marital/family conflicts, and abnormal behavior not attributed to a mental disorder are all usually excluded from coverage. Therefore, respondents may be answering about mental health services that are not


covered by CalPERS which may cause the result to be lower than expected. Finally, access to mental health care is a statewide issue due to stigma associated with mental health conditions and the limited number of mental health providers in California. We will continue to work with our health plan partners to assess our current mental health services, gaps, and challenges to reduce barriers so that members can receive appropriate mental health care. Updated performance data will be available in June 2020.


72.265.8

2016 201840

50

60

70

80

90

100

% of members who answered "Usually" or "Always" to survey question

Mental Health and Well Being

Baseline At-Risk Target Trendline



Measure Title: CEM Cost Per Member Executive Owner: Michael Cohen Strategic Goal: Reduce Complexity Strategic Objective: Streamline operations to gain efficiencies, improve productivity, and reduce costs Associated Initiative(s): Develop and implement continuous process improvement framework; Develop

Information Technology Service Level Agreements

Status: Off-Target Numeric Status: $211

Description: From the annual CEM Pension Administration Benchmarking Survey, reduce cost per member, exclusively to pension administration, and does not include health and investment.

Baseline: $207 cost per member for FY 2016-17

Target: Reduce by 2% annually


Reporting Range: 07/01/17-6/30/18

Thresholds: On-Target: Reduced by 2.0% annually At-Risk: Reduced by 1.5-1.99% annually Off-Target: Reduced by less than 1.5% annually

Status Narrative: Due to increasing administrative costs spread across a steady membership base, the cost per member rose to $211 for FY 2017-18. The 2.2% increase is largely attributed to salary and benefit increases negotiated through the State’s collective bargaining processes.



207

211

202.86

198.8

194.83

2017 2018 2019 2020170

180

190

200

210

220

Cost per Member

CEM Cost Per Member

Baseline Off-Target Target Trendline



Measure Title: Funded Status Executive Owner: Michael Cohen Strategic Goal: Fund Sustainability Strategic Objective: Fund the system through an integrated view of pension assets and liabilities Associated Initiative(s): Alignment of Asset Liability Management

Status: Pending Refresh Numeric Status: N/A

Description: Funded status is a measure of a pension system’s health and is determined by dividing the market value of assets by the actuarial accrued liability. This measure will evaluate overall Funded Status for the three major components of the Public Employees’ Retirement Fund (PERF): State, School, and Public Agency employers.

As part of the CalPERS ALM cycle, the Board will examine the current funded status of the system and make decisions in alignment with the goal of strengthening the long-term sustainability of the pension fund. CalPERS is also focused on reducing complexity and system costs which will contribute positively to the Funded Status of the PERF.

Annually the Actuarial Office provides the Funded Status of the previous fiscal year and Projected Funded Status of the current fiscal year. The inputs for this metric are influenced by five main factors:

• Payment of unfunded liabilities • Actual vs. expected investment returns • Change in actuarial methods and assumptions • Benefit changes • Actuarial experience

The funded status is based on a 7.0% discount rate.

Baseline: PERF 67.9% (as of 6/30/17)

Target: Long-term (beyond the current strategic plan) funded status of 100%

Refresh Frequency: Annually, August

Reporting Range: 07/01/17 -06/30/2018


Thresholds: On-Target: >100% Funded Status At-Risk: 80% to 100% Funded Status Off-Target: <80% Funded Status

Status Narrative: For current estimated funded status, see Projected Funded Status measure. Actual results will not be available until August 2019 when the annual actuarial valuation reports for fiscal year 2018 are anticipated to be completed. The summary sheet has been updated to reflect this change. Performance Trend Chart:

67.9

2017 201840

50

60

70

80

90

100

% of Funded Status

Funded Status

Baseline Target



Measure Title: Projected Funded Status Executive Owner: Michael Cohen Strategic Goal: Fund Sustainability Strategic Objective: Fund the system through an integrated view of pension assets and liabilities Associated Initiative(s): Alignment of asset liability management; Redesign and enhance the actuarial valuation

system; Actuarial valuation system-advanced analytics


Description: Monitoring the actual vs. projected funded status of the PERF to determine if CalPERS’ goal of 100% funding is on track.

Annually, the Actuarial Office provides the Funded Status of the previous fiscal year and the projected funded status of the current fiscal year.

The inputs for this metric are influenced by five main factors: • Payment of unfunded liabilities • Actual vs. expected investment returns • Change in actuarial methods and assumptions • Benefit changes • Actuarial experience

Annually, the Actuarial Office produces valuation reports for the State, Schools and Public Agency employers to determine minimum employer contribution requirements and the Funded Status of each plan. Because Funded Status changes slowly over time, it is important to monitor performance trends to indicate if long-term funding goals are on track. The baseline and target for this measure will change annually based on the actual valuation results. The funded status is based on a 7.0% discount rate.

Baseline: The projected June 30, 2018 funded status is 68.7%, based on the results and assumptions used in the June 30, 2017 valuations.

Target: Meet or exceed the projected funded status of the PERF of 68.7% as of 6/30/18, based on actuarial valuation reports.



Thresholds: On-Target: Not more than 1.0% below the Projected Funded Status At-Risk: 1.0-3.0% below the Projected Funded Status Off-Target: Greater than 3.0% below the Projected Funded Status

Status Narrative:


Based on preliminary fiscal year returns (2018-19), the funded status of the overall CalPERS fund is an estimated 70%. Actual results will not be available until August 2019 when the annual actuarial valuation reports for fiscal year 2018 are anticipated to be completed.



Measure Title: 1-Year Total Expected Fund Volatility Executive Owner: Yu (Ben) Meng Strategic Goal: Fund Sustainability Strategic Objective: Mitigate the risk of significant investment loss Associated Initiative: Investment risk management and performance attribution


Description: The total (gross) risk of the Total Fund (Fund) expressed in the standard deviation (1-year) of the Funds’ total return distribution, expressed in percent. Reported on a fiscal year-end basis, the metric will measure the expected volatility of the Total Fund returns. The current target was derived through the Capital Marketing Assumption (CMA) process used in the November 2017 Asset Liability Management (ALM) Cycle, to be effective 7/1/18. The ALM process occurs every four years.

Baseline: Current Barra volatility estimate for PERF is 7.6%, as of 6/30/18

Target: Current total expected fund volatility is 8% or less, as of 7/1/18.


Reporting Range: 07/01/17 – 06/30/18

Thresholds: On-Target: Equal to or less than the target At-Risk: 1-50 basis points excess of target Off-Target: 51 basis points or more excess of target

Status Narrative: As of June 2018, this measure was On-Target. Current forecast volatility of 7.6% vs. 8.1% in prior year

• 0.5% risk reduction primarily a reflection of historically low market volatility • Implied 28% chance of negative returns in a given year; however, it likely understated the probability as

market returns are not normally distributed Growth assets, especially public equities, remain the primary drivers of total volatility. Updated performance data will be available August 2019 and will be reported in Quarter 1 of the 2019-20 fiscal year.



Measure Title: Annualized (5-Year) Excess Investment Returns Relative to Total Fund Policy Benchmark

Executive Owner: Yu (Ben) Meng Strategic Goal: Fund Sustainability Strategic Objective: Deliver target risk-adjusted investment returns Associated Initiative(s): Enhance capital allocation framework; Enhance investment platform and controls


Description: Measures annualized 5-year excess investment returns relative to the Total Fund policy benchmark, which is a composite established by the Investment Committee-assigned asset class benchmarks and the target weights derived from the Asset Liability Management (ALM) process.

Reported on a fiscal year-end basis, the metric will measure the effectiveness of the Investment Office in meeting the objective of achieving investment performance relative to relevant targets. The actual performance generated by the portfolio is affected by both the active under- or over-weighting of the asset classes within their policy ranges, as well as the performance of the individual asset classes vs. their specified policy benchmark.

Baseline: The Total Fund policy benchmark will be recalculated on a rolling 5-year period.

Target: Meet or exceed the Total Fund policy benchmark.

Policy benchmark weights are fixed and do not vary except by Investment Committee action, such as the approval of interim target weights.


Reporting Range: FY 2014-15 through FY 2018-19

Thresholds: On-Target: Exceed Total Fund Policy Benchmark At-Risk: Meet or Trail Total Fund Policy Benchmark by up to 10 basis points Off-Target: Trail Total Fund Policy Benchmark by 10 basis points or more

Status Narrative: As of June 2018, this measure reported as At-Risk. The PERF generated a 5-year annualized Total Net Return of 8.1% and underperformed the policy benchmark by 7 basis points. The Total Net Return exceeded the actuarial target of 7.375%.


The Investment Office executive staff developed the INVO 2020 Vision, which is a 5-year strategic plan that defines long-term direction and support of the CalPERS Strategic Plan while addressing management of the CalPERS Investment portfolio in a cost-effective, transparent, and risk-aware manner. Updated performance data will be available August 2019 and will be reported in Quarter 1 of the 2019-20 fiscal year.



Measure Title: Stakeholder Assessment Survey - Risk Executive Owner: Brad Pacheco Strategic Goal: Fund Sustainability Strategic Objective: Educate employers, members, and stakeholders on system risks and mitigation strategies Associated Initiative(s): Stakeholder education on system risks & mitigation

Status: On-Target Numeric Status: 5.27

Description: The measure scores the overall stakeholder perception of CalPERS' success in explaining and mitigating risks to the System. Data is gathered through the annual Stakeholder Perception Survey in response to the statement "I understand the risks inherent in the System and I am confident CalPERS is taking steps to reduce the risks." The target will be met through continued stakeholder engagement, proactive communications with our various member/employer/retiree populations, and through focused efforts to share our risks and risk mitigation strategies.

Baseline: 5.17 out of 7 possible points

Target: Five-year goal: achieve a score of 5.43 out of 7; a 5% increase from the baseline. Annual increases of 1% (0.05 points).


Reporting Range: February 2018 – May 2019

Thresholds: On-Target: Annual increase of 0.05 or more points from the baseline figure each year At-Risk: Annual increase of 0.0 – 0.04 points from the baseline figure each year Off-Target: Decrease from the baseline figure

Status Narrative: The measure is on-target for this reporting period. This year’s survey results show an overall favorable increase towards CalPERS from the previous year.



5.175.01

5.17 5.22 5.27

5.27

1

2

3

4

5

6

7

2017 2018 2019

Score out of 7 possible points

Stakeholder Assessment Survey - Risk

Baseline On-Target Off-Target Target Trendline



Measure Title: Investment Managers Policies and Procedures for ESG Factor Integration Executive Owner: Yu (Ben) Meng Strategic Goal: Fund Sustainability Strategic Objective: Integrate environmental, social, and governance considerations into investment decision

making Associated Initiative(s): Investment beliefs and environmental, social, and governance risk integration


Description: CalPERS team members developed an annual survey of internal and external strategic managers on their policies and procedures related to ESG risk and opportunity considerations. This was established as a Strategic Priority in August 2016 as part of CalPERS’ Environmental Social and Governance (ESG) strategy. Asset classes are continuing to refine and evolve ESG integration efforts, including continued sharing of best practices internally and amongst external investment managers. This annual survey is to determine the percentage of internal and external strategic managers that have policies and procedures articulating how ESG risk and opportunity considerations are incorporated into investment processes and decisions.

Baseline: As of 2016, the baseline for this measure will be 96% with a target of 100% integration, as established by the INVO Sustainable Investments (SI) staff responsible for central monitoring, external communication, and establishment of measurement processes and reporting.

Target: 100% of internal and external investment managers have policies and procedures in place to integrate ESG factors into investment decisions.


Reporting Range: 07/01/17 - 06/30/18

Thresholds: On-Target: 80% and above At-Risk: 50-79% Off-Target: Less than 50%

Status Narrative: As of June 2018, this measure reported as Pending Refresh. Based on the survey methodology and universe of managers surveyed, 96% of managers incorporated ESG practices in their investment processes. The managers surveyed represented approximately 81% of CalPERS externally managed portfolio NAV. CalPERS team members continue to develop a framework to conduct an annual survey of internal/external managers on their policies and procedures related to ESG risk and opportunity considerations. This was


established as a Strategic Priority in August 2016 as part of CalPERS' Environmental Social and Governance (ESG) strategy. Asset classes are continuing to refine and evolve ESG integration efforts, including continued sharing of best practices internally and amongst external investment managers. Updated performance data will be available August 2019 and will be reported in Quarter 1 of the 2019-20 fiscal year. Performance Trend Chart:

96

65

70

75

80

85

90

95

100

2016 2017 2018

% of ESG policies and procedures in place

Investment managers policies and procedures for ESG factor integration performance

Baseline Target



Measure Title: Access to Care Executive Owner: Liana Bailey-Crimmins Strategic Goal: Health Care Affordability Strategic Objective: Restructure benefit design to promote high-value health care Associated Initiative(s): Medical pharmacy site of care management

Status: On-Target Numeric Status: 86.2% (covering experience in 2018)

Description: Percent of CalPERS members responding that they received routine care as soon as they needed it in the last 12 months. This metric represents the perception of CalPERS members’ access to care when needed. A higher percentage is considered good. Factors that can influence this measure include enforcement of contractual requirements and collaborative efforts with CalPERS health plan partners.



Target: 90%



Thresholds: On-Target: 85% + At-Risk: 80 – 84.9% Off-Target: Below 80%

Status Narrative: As of June 2019, this measure was On-Target: 86.2% of responding CalPERS members said that during 2018, they received routine care as soon as they needed it. Updated performance data will be available in June 2020.



86 86.4 86.6 86.2

65

70

75

80

85

90

95

100

2015 2016 2017 2018

% of CalPERS members receiving routine care as needed

Access To Care

Baseline On-Target Target Trendline



Measure Title: Total Health Care Cost Annual Change Executive Owner: Liana Bailey-Crimmins Strategic Goal: Health Care Affordability Strategic Objective: Restructure benefit design to promote high-value health care Associated Initiative(s): Value-based insurance design: feasibility; Pharmacy benefits management; Medical

reference pricing expansion


Description: This measure assesses the annual overall percent change in CalPERS Health Care premiums compared to the U.S. Health Care inflation rate, which is measured by the change in the U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index (CPI) for medical care. The medical care index is one of eight major groups in the CPI and is divided into two main components: medical care services and medical care commodities, each containing several item categories, including health insurance and medical drugs.

Factors that can influence this measure include member utilization, unit costs, and contract negotiations. Innovations and efficiencies such as promoting efficient hospital plan networks, value based purchasing and integrated health models, help mitigate medical trend increases.

The target and thresholds change annually based on the CPI for medical care.

Measure trend: • 2.33% for 2018 • 1.16% for 2019

Baseline: The federal government calculates CPI and given that CPI will change annually, there is no baseline to report.

Target: For 2019, below 4.97 percent. The goal is to keep the annual overall increase in CalPERS Health Care premiums below the change in the CPI for medical care (1.97% for 2018) plus three percent.

Refresh Frequency: Annually, January


Thresholds: On-Target: Below 4.97% At-Risk: 4.97-6.97% Off-Target: Above 6.97%


Status Narrative: As of January 2019, this measure was reported at 1.16% and was On-Target. Updated Performance data will be available in January 2020.


CPI 3.79 CPI 2.51 CPI 1.97

6.79

5.51

4.97

3.24

2.33

1.16

2017 2018 20190

1

2

3

4

5

6

7

8

Annual overall percent change in CalPERS HC premiums

Total Health Care (HC) Cost Annual Change

% Change in HC (CPI) Baseline Range (CPI+3%) On-Target Range (CPI+3%) Trendline



Measure Title: Self-Reported Overall Health Status Executive Owner: Liana Bailey-Crimmins Strategic Goal: Health Care Affordability Strategic Objective: Improve the health status of employees, members and their families, and the


dashboard; Partner with health plans to engage in community activities

Status: On-Target Numeric Status: 85.7% (covering experience in 2018)

Description: This measure assesses the proportion of CalPERS members who rate their overall health as good, very good, or excellent.

This metric represents the percentage of CalPERS members who rated their overall health as good, very good, or excellent on the annual Health Plan Member survey. A higher percentage is considered good.

Factors that can influence this measure include enforcement of contractual requirements and collaborative efforts with CalPERS health plan partners.



Target: 90%




Status Narrative: As of June 2019, this measure was On-Target with a score of 85.7%. Updated performance data will be available in June 2020.



88.4 87.8 87.585.7

2015 2016 2017 201840

50

60

70

80

90

% of CalPERS members who rate overall health as good, very good, or excellent

Self-Reported Overall Health Status




Measure Title: Opioids - Dose Executive Owner: Liana Bailey-Crimmins Strategic Goal: Health Care Affordability Strategic Objective: Reduce the overuse of ineffective or unnecessary medical care Associated Initiative(s): Statewide collaboration through Smart Care California


Description: Morphine milligram equivalents (MME) per capita on an incurred year basis for Basic plans.

This measure has undergone development. Prior to 2018, the original target for this measure was tentatively the national average (640) because CalPERS was unable to perform MME analyses in the data warehouse. As CalPERS team members discovered that CalPERS is already much better than national and California averages, we are shifting to a target of 45% of the national average as a “stretch” goal, and 50% of the national average as “red zone.” (The calculations exclude Methadone and Suboxone, drugs which are typically used to treat opioid addiction.)

The federal Centers for Disease Control and Prevention (CDC) reported that the average daily morphine milligram equivalents (MME) of opioids prescribed per capita in the United States increased from 180 in 1999 to 782 in 2010, then decreased to 640 in 2015. The California MME per capita, as reported by amfAR (The Foundation for AIDS Research) is 467.0.

Medicare data are currently unavailable for this measure. However, the Centers for Medicare and Medicaid Services (CMS) requires Medicare plans to take actions regarding opioid management, and our Medicare plans are following CMS guidelines in this area.

Baseline: 317.46 for 2017

Target: Below 288

Refresh Frequency: Annually, April


Thresholds: On-Target: Below 288 At-Risk: 289-319 Off-Target: 320 and above

Status Narrative: As of April 2019, this measure was On-Target: 258.53 MME per capita for CalPERS membership. Updated performance data will be available in April 2020.



317.46

258.53

287

100

150

200

250

300

2017 2018

Morphine milligram equivalents (mme) per capita for Basic Plan

Opioids - Dose




Measure Title: Opioids - Duration Executive Owner: Liana Bailey-Crimmins Strategic Goal: Health Care Affordability Strategic Objective: Reduce the overuse of ineffective or unnecessary medical care Associated Initiative(s): Statewide collaboration through Smart Care California

Status: On-Target Numeric Status: 4.84%

Description: Prescription opioid misuse is a public health problem that can lead to long-term health consequences, such as opioid use disorder and death. Therefore, CalPERS management requested a measure related to prescription opioid use.

This internal measure uses Milliman’s Evidence-Based Measure (EBM) 2018 tool to report “The percentage of members receiving prescription opioids at high dosage (average morphine milligram dose [MED] greater than 120 mg) out of members 18 years and older receiving prescription opioids for greater than or equal to 156 days during the measurement year.” Members with cancer, sickle cell disease, or those who only had a single opioid dispensing event are excluded. This measure is based on the Healthcare Effectiveness Data and Information Set (HEDIS) 2018 measure “Use of Opioids at High Dosage” which has slightly different specifications and a different way of reporting the results. Because the internal measure is different than the HEDIS measure and since no national published HEDIS results are available for benchmarking, the target and thresholds were developed internally.

Baseline: 5.41% for January 2017 to December 2017 period.

Target: Below 8.00%



Thresholds: On-Target: <8.00% At-Risk: 8.00% - 10.00% Off-Target: >10.00%

Status Narrative: This measure was developed in June 2019 and is On-Target for this reporting period with a score of 4.84%. Updated performance data will be available in June 2020.



5.41

4.84

0

1

2

3

4

5

6

7

8

9

2017 2018

Percentage of members receivng prescription opioids at high dosage

Opioids - Duration




Measure Title: C-Section Rate Executive Owner: Liana Bailey-Crimmins Strategic Goal: Health Care Affordability Strategic Objective: Reduce the overuse of ineffective or unnecessary medical care Associated Initiative(s): Statewide collaboration through Smart Care California


Description: Percent of in-network hospitals providing obstetric services to CalPERS members that have a NTSV (“nulliparous” [i.e., first time], “term” [i.e., not preterm or post-term], “single” [i.e., not twins, triplets, etc.], and “vertex” [i.e., not breech]) cesarean section rate of 23.9% or less.

Although cesarean births can be lifesaving and medically optimal, far too many are performed for non-medical reasons. This measure originally involved total C-section rates; however, both nationally and in California (e.g., under Let's Get Healthy California), the preferred measure for C-sections is the NTSV rate, and the NTSV C-section target rate is 23.9% or less.

Calculating the overall NTSV C-section rates among CalPERS membership would require linkage to external data sources, which would be administratively difficult. In contrast, it is simple to determine from each health plan which contracted hospitals provide obstetric services to CalPERS members.

Baseline: 36.96%. That is, out of the 257 in-network hospitals that provided obstetric services to CalPERS members in 2017, 95 (36.96%) had an NTSV C-section rate of 23.9% or less.

Target: 45% of in-network hospitals meet the NTSV C-section rate of 23.9%



Thresholds: On-Target: >45% At-Risk: 37-45% Off-Target: <37%

Status Narrative: This measure was previously under development in FY 2018-19. Performance data will be available in August 2019.



36.96

35

40

45

2017 2018 2019

% of in-network hospitals that meet NTSV C-section rate

C-Section Rate

Baseline Target



Measure Title: Acute Onset Lower Back Pain and Related Opioid Use Executive Owner: Liana Bailey-Crimmins Strategic Goal: Health Care Affordability Strategic Objective: Reduce the overuse of ineffective or unnecessary medical care Associated Initiative(s): Statewide collaboration thought Smart Care California

Status: Under Development Numeric Status: N/A

Description: Under development

Baseline: Under development

Target: Under development

Refresh Frequency: Under development

Reporting Range: Under development

Thresholds: On-Target: Under development At-Risk: Under development Off-Target: Under development

Status Narrative: This measure is under development. In May 2019, the Health Policy and Benefits Branch (HPBB) hired the Medical Program Consultant (MPC) who is the Subject Matter Expert (SME) that provides expertise and guidance in the development of data collection parameters and methodologies for this measure. With CalPERS’ commitment of leadership in the health care industry and continuous search of new and innovative strategies to maintain health care affordability, this measure will be developed in FY 2019/20.



Measure Title: Acute Onset Lower Back Pain and Physical Therapy Executive Owner: Liana Bailey-Crimmins Strategic Goal: Health Care Affordability Strategic Objective: Reduce the overuse of ineffective or unnecessary medical care Associated Initiative(s): Statewide collaboration through Smart Care California


Description: Under development

Baseline: Under development

Target: Under development

Refresh Frequency: Under development

Reporting Range: Under development

Thresholds: On-Target: Under development At-Risk: Under development Off-Target: Under development

Status Narrative: This measure is under development. In May 2019, the Health Policy and Benefits Branch (HPBB) hired the Medical Program Consultant (MPC) who is the Subject Matter Expert (SME) that provides expertise and guidance in the development of data collection parameters and methodologies for this measure. With CalPERS’ commitment of leadership in the health care industry and continuous search of new and innovative strategies to maintain health care affordability, this measure will be developed in FY 2019/20.



Measure Title: Overuse of Imaging for Back Pain Executive Owner: Liana Bailey-Crimmons Strategic Goal: Health Care Affordability Strategic Objective: Reduce the overuse of ineffective or unnecessary medical care Associated Initiative(s): Statewide collaboration through Smart Care California

Status: On-Target Numeric Status: 84.4%

Description: According to the National Committee for Quality Assurance (NCQA), evidence shows that unnecessary or routine imaging (X-ray, MRI, CT scans) for low back pain is not associated with improved outcomes. It also exposes patients to unnecessary harms such as radiation and further unnecessary treatment. For the majority of individuals who experience severe low back pain, pain improves within the first two weeks of onset. Avoiding imaging for patients when there is no indication of an underlying condition can prevent unnecessary harm and unintended consequences to patients and can reduce health care costs.

This strategic measure tracks CalPERS’ health plan performance in this area based on the nationally-accepted Healthcare Effectiveness Data and Information Set (HEDIS) measure “Use of Imaging Studies for Low Back Pain” which assesses adults 18–50 with a primary diagnosis of low back pain who did not have an imaging study (plain X-ray, MRI or CT scan) within 28 days of the diagnosis (a higher score indicates better performance). The Health Care Decision Support System data is used so that standardized data definitions can be applied across all health plans.

Measure trend: • 84% for 2017

Baseline: 84.8% (Combined HMO and PPO percentage for 2016)

Target: 85%



Thresholds: On-Target: 80% or higher At-Risk: 75-79% Off-Target: Below 75%

Status Narrative: As of June 2019, this measure was On-Target with a score of 84.4%. Updated performance data will be available in June 2020.



84.8

8484.4

2016 2017 201880

81

82

83

84

85

86

87

88

89

90

% of CalPERS members who did not have imaging study

Overuse of Imaging for Back Pain




Measure Title: CEM Pension Complexity Score Executive Owner: Donna Lum Strategic Goal: Reduce Complexity Strategic Objective: Simplify Programs to improve service and/or reduce cost Associated Initiative(s): CEM Complexity Score Maintenance


Description: The total Cost Effectiveness Measurement (CEM) complexity score represents the weighted average of CEM’s complexity measure by cause, from the annual CEM Pension Administration Benchmarking Survey.

Baseline: Weighted average complexity score 59.8 (Fiscal Year 2016-17)

Target: Maintain weighted average complexity score between 58 – 62


Reporting Range: August-June

Thresholds: On-Target: Complexity score 58 – 62 At-Risk: Complexity score <58 Off-Target: Complexity score >62

Status Narrative: CEM’s complexity scoring methodology changed in 2018, from a relative measure to absolute. Using the new methodology, the CEM complexity score has been adjusted retroactively to 59.5 in FY 2017-18 and 59.8 in FY 2016- 17, a slight reduction in complexity from the previous year. Please note, due to the methodology change, the existing description, baseline, target, and thresholds were revaluated and adjusted.



59.8 59.5

2017 201820

30

40

50

60

70

80

Weighted average complexity score

CEM Pension Complexity Score




Measure Title: External Investment Manager Reduction Strategy Executive Owner: Yu (Ben) Meng Strategic Goal: Reduce Complexity Strategic Objective: Simplify programs to improve service and/or cost Associated Initiative(s): FY 2017-18 External manager monitoring, expectations, and

reduction strategy (Initiative transitioned to core workload in FY 2018-19)


Description: This metric examines the total population of strategic and transition external managers retained to manage assets on behalf of CalPERS. Transparent, robust, fair and competitive ongoing evaluation processes are driving this metric.

The INVO 2020 Vision, a 5-year strategic plan, focuses on reducing management fees and complexity, enhancing governance and manager expectations, and moving to fewer but more strategic partnerships.

Baseline: As of FY 2016-17, 151 external strategic and transition managers

Target: 100 or fewer external strategic and transition managers by June 2020



Thresholds: On-Target: Decrease of 5 or more managers per year At-Risk: Decrease of 4 or less managers per year Off-Target: No reduction, or increase in the # of managers

Status Narrative: As of June 2018, this measure reported as On-Target. This metric examines the total population of strategic and transitional external managers retained to manage assets on behalf of CalPERS. Significant progress has been made over the last year, as of June 2018, the Investment Office has met the goal of decreasing 5 or more managers for FY 2017-18, with the current count at 144 (-7 from the baseline measurement). Transparent, fair, and competitive ongoing evaluation processes are driving this metric. The INVO 2020 Vision, a 5-year strategic plan, focuses on reducing management fees and complexity, enhancing governance and manager expectations, and moving to fewer but more strategic partnerships. Updated performance data will be available August 2019 and will be reported in Quarter 1 of the 2019-20 fiscal year.



100

151

144

2017 201895

105

115

125

135

145

155

Number of External Managers

External Investment Manager Reduction Strategy




Measure Title: CEM Information Technology Capability Score Executive Owner: Doug Hoffner Strategic Goal: Reduce Complexity Strategic Objective: Simplify programs to improve service and/or reduce cost Associated Initiative(s): Mature targeted information technology capabilities

Status: On-Target Numeric Status: 85

Description: This measures the overall contribution of the value IT provides to business capability. Drivers of this metric include website and contact center access to member data, as well as data accuracy and completeness.

Baseline: The baseline is the FY 2015-16 CEM IT Capability Score of 85.

Target: CalPERS target is to stay within the range of 80-90.



Thresholds: On-Target: 80 or above At-Risk: 75 to 79 Off-Target: Less than 75

Status Narrative: The score for FY 2017-18 was 85. This score is above peer median of 79 and has remained reasonably consistent for the past four years. Updated performance data will be available in June 2020.



85

84

85

75

80

85

90

2016 2017 2018

IT Capability Score

CEM Information Technology Capability Score




Measure Title: Overhead Operational Cost Executive Owner: Michael Cohen Strategic Goal: Reduce Complexity Strategic Objective: Streamline operations to gain efficiencies, improve productivity, and reduce costs Associated Initiative(s): Develop and implement continuous process improvement framework


Description: Overhead operational costs calculated for pension administration and health.

Baseline: The overhead operational costs for FY 2016/17 was $210,114,665. After adjusting for General Salary Increases in FY 2017/18, the effective baseline for comparison with FY 2017/18 expenses was $215,263,446.

Target: Reduce by 1.5-2% annually

Refresh Frequency: Annually, September


Thresholds: On-Target: Reduced by 1.5-2.0% annually At-Risk: Reduced by 1.0-1.49% annually Off-Target: Reduced by less than 1.0% annually

Status Narrative: As of September 2018, the overhead operational costs were reported On-Target for FY 2017-18. The overhead operation cost was $211,033,714; a 2.0% reduction when compared to the adjusted baseline. Updated performance data will be available in September 2019.



Measure Title: 5-Year Net Value Added Executive Owner: Yu (Ben) Meng Strategic Goal: Reduce Complexity Strategic Objective: Streamline operations to gain efficiencies, improve productivity, and reduce costs Associated Initiative(s): Enhance business effectiveness, resource allocation, and efficiency of investment

programs


Description: 5-year net value added relative to an appropriate peer universe median return adjusted for composition of asset allocation and after expenses. Each year, INVO participates in a Cost Effectiveness Measurement Benchmarking (CEM) survey which independently analyzes costs against a customized peer group.

Baseline: 5-year net value-added relative to an appropriate United States’ (US) peer universe median return, adjusted for composition of asset allocation and after expenses. The baseline will be readjusted based on the new aggregate 5-year period.

Target: Exceed the median US peer on investment cost and returns


Reporting Range: Current 5 Year Period: FY 2012-13 through FY 2016-17

Thresholds: On-Target: Exceed the US Peer median At-Risk: Meet the US Peer median Off-Target: Fall below the US Peer median Status Narrative: As of June 2018, this measure reported as Off-Target.

This measure is the analysis of the Investment Office’s cost drivers and cost structure versus US peers. Net value added is the component of total return from active management. The most recent data available indicated CalPERS did not exceed the US Peer median on its 5-year 2016 Net value added results; however, CalPERS did have a cost savings of 4bps versus the US peer universe. CalPERS 5-year Net value added was -0.1%, while the US Peer median was 0.2%.

While the 5-year Net value added fell below the US median, the CalPERS 5-year net total return was 8.5%, above the US median of 8.3%. CalPERS continues to be low cost compared to the US peer universe and its global custom peer group.

Continued focus on delivering more value for cost through effective management of portfolios, resources, and technology. This includes renegotiation of external management fees and reduction of consulting and other related operating costs.

Updated performance data will be available August 2019 and will be reported in Quarter 1 of the 2019-20 fiscal year.



Measure Title: Stakeholder Assessment Survey – Compliance and Risk Executive Owner: Brad Pacheco Strategic Goal: Risk Management Strategic Objective: Enhance compliance and risk functions throughout the enterprise Associated Initiative(s): Increase enterprise-wide compliance awareness


Description: The measure scores the overall stakeholder perception of CalPERS' success in implementing functions and programs that support compliance and risk. Data is gathered through the annual Stakeholder Perception Survey in response to the statement: "CalPERS has effective functions and programs to address compliance and risk." The target will be met through continued stakeholder engagement and the consistent demonstration of our commitment to a culture of compliance and risk as an organization and as a system.

Baseline: 5.16 out of 7 possible points

Target: Five-year goal: 5.43 out of 7; a 5% increase from the baseline. Annual increases of 1% (0.05 points)


Reporting Range: February 2018-May 2019

Thresholds: On-Target: Annual increase of 0.05 or more points from the baseline figure each year At-Risk: Annual increase of 0.0-0.04 points from the baseline figure each year Off-Target: Decrease from the baseline figure

Status Narrative: This measure is On-Target for this reporting period and reflects an overall increase in general confidence in CalPERS over last year.



5.16

5.34

5.04

5.17 5.21

5.26

1

2

3

4

5

6

2017 2018 2019

Score out of 7 possible points

Stakeholder Assessment Survey - Compliance & Risk

Baseline On-Target Off-Target Target Trendline



Measure Title: Risk Employee Awareness Survey Executive Owner: Michael Cohen Strategic Goal: Risk Management Strategic Objective: Enhance compliance and risk functions throughout the enterprise Associated Initiative(s): Increase enterprise-wide risk awareness; Strategic risk measures


Description: Annual Employee survey example question: “I am aware of CalPERS risk program. I incorporate risk functions into my daily work.”

Each division has education and communication components intended to increase team member and leadership awareness and understanding of CalPERS’ expectations and their personal responsibilities under the risk functions on an annual basis. The metric is the percentage of CalPERS employees, including team members, managers, and executives, that respond “Yes” to the question: “I am aware of CalPERS risk program. I incorporate risk functions into my daily work.” on the annual employee survey.

Baseline: Based on the 2018 CalPERS Compliance & Risk Annual survey, 78% of respondents answered “Yes” to the question, “I am aware of CalPERS risk program. I incorporate risk functions into my daily work.”

Target: Incrementally increase the baseline by 2% annually (8% from 2019-2022), with a target of 86%.

Refresh Frequency: Annually, February

Reporting Range: Fiscal Year FY 2018-19

Thresholds: On-Target: Annual increase of ≥2% At-Risk: Annual increase of 0.1-1.9% Off-Target: No annual increase

Status Narrative: As of February 2019, this measure reported out 89%, which exceeded the 2022 target of 86%. The survey response rate increased from 39% in 2018 to 43% in 2019. Enterprise Risk Management Division (ERMD) attributes the increase to the implementation of the ERMD Communication Plan that primarily focused on Divisional Operational Risk Event training during the reporting period. Updated performance data will be available February 2020.



78

89

86

70

75

80

85

90

2018 2019

% of "Yes" responses to " I am aware of CalPERS risk program..."

Risk Employee Awareness Survey




Measure Title: Risk Program Maturity Assessment Executive Owner: Michael Cohen Strategic Goal: Risk Management Strategic Objective: Enhance compliance and risk functions throughout the enterprise Associated Initiative(s): Increase enterprise-wide risk awareness ; Strategic risk measures

Status: Pending Refresh Numeric Status: N/A Description: Risk program maturity model assessments are completed annually to assess risk

functions throughout the enterprise. Maturity scores are refined with a (+) or (-) to indicate intermediate levels of maturity.

Baseline: The baseline is a 3 on a point scale of 1 (low) to 5 (high) based on the 2017-18 Gartner Corporate Executive Board’s Maturity Survey results.

Target: CalPERS risk program maturity assessment scores are targeted to increase one point by 2021-22, from the baseline scores set in FY 2017-18.

Refresh Frequency: Annually, January

Reporting Range: FY 2018-19

Thresholds: On-Target: Year-over-year increase in score At-Risk: No change in score Off-Target: Year-over-year decrease in score

Status Narrative: Maturity scores are refined with a (+) or (-) to indicate intermediate levels of maturity. The Risk Program Maturity Assessment score increased from 3 to 3+ for FY 2018-19. Updated performance data will be available January 2020.



3

3.33

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

2018 2019

Maturity Assessment Score

Risk Program Maturity Assessment




Measure Title: Compliance Employee Awareness Survey Executive Owner: Marlene Timberlake D’Adamo Strategic Goal: Risk Management Strategic Objective: Enhance compliance and risk functions throughout the enterprise Associated Initiative(s): Increase enterprise-wide compliance awareness; Increase compliance program maturity


Description: Annual Employee survey example question: “I am aware of CalPERS’ compliance program. I incorporate compliance functions into my daily work.”

Baseline: Based on the 2018 CalPERS Compliance & Risk Annual survey, 87% of respondents answered “Yes” to the question, “I am aware of CalPERS’ compliance program. I incorporate compliance functions into my daily work.”

Target: Maintain 90% or greater positive response rate to the compliance survey question through June 2022.

Refresh Frequency: Annually, February

Reporting Range: July 1, 2018 to June 30, 2019

Thresholds: On-Target: 90-100% At-Risk: 80-89% Off-Target: ≤ 79%

Status Narrative: This Measure was On-Target with a status of 93% for FY 2018-19; CalPERS increased the percentage of affirmative responses to the question, “I am aware of CalPERS’ compliance program, I incorporate functions into my daily work,” to 93% from the baseline of 87% set in FY 2017-18. The increased score puts this strategic measure on-target for the year. The survey results reflect the efforts of the Enterprise Compliance team to promote compliance awareness through our comprehensive communication and training plan. Major efforts contributing enterprise-wide awareness of CalPERS’s compliance program include regular training sessions for Form 700 and Personal Trading regulations, Annual Compliance Week events, and the launch of new web-based ethics training for all CalPERS team members. Additionally, CalPERS compliance and risk liaisons continue to provide support and communications for compliance functions within the enterprise’s largest branches. Enterprise Compliance will use the results of the survey to build the FY 2019-20 Communications and Training Plan. Updated Performance Data will be available in February 2020.



87

93

2018 201980

82

84

86

88

90

92

94

96

98

100

% of "Yes" responses to "I am aware of CalPERS' compliance program"

Compliance Employee Awareness Survey




Measure Title: Compliance Program Maturity Assessment Executive Owner: Marlene Timberlake D’Adamo Strategic Goal: Risk Management Strategic Objective: Enhance compliance and risk functions throughout the enterprise Associated Initiative(s): Increase enterprise-wide compliance awareness; Increase compliance program maturity

Status: On-Target Numeric Status: 3

Description: Assesses the compliance and ethics program’s functional performance against a structured framework. Measured on a scale ranging from 1 (low) to 5 (high), maturity is an organization’s performance relative to Gartner’s best practice research. Maturity scores are refined with a (+) or (-) to indicate intermediate levels of maturity.

Baseline: The Fiscal Year 2017-18 baseline for Enterprise Compliance (ECOM) is a 2+ on a point scale of 1 (low) and 5 (high)

Target: CalPERS compliance maturity assessment score is targeted to increase one point by FY 2021-22, from the baseline scores set in FY 2017-18


Reporting Range: July 1, 2018 to June 30, 2019

Thresholds: On-Target: Year-over-year increase in score. At-Risk: No change in score. Off-Target: Year-over-year decrease in score.

Status Narrative: The industry benchmark set by Gartner is 3. There were 168 other organizations who took the assessment, only three were in the public sector. CalPERS was the only public pension fund to take the assessment. The increase from last year’s 2+ shows that the program is engaging in the right activities to mature the organization’s compliance program. The activities included launching the annual governance reviews of policies, delegations, and charters. Assessed compliance with board reporting requirements. And conducted enterprise-wide compliance risk assessment and identified top compliance risks, the results will be used to help build out the plan for the following fiscal year.



2.33

3

3.33

2018 20191

2

3

4

5

Maturity Assessment Score

Compliance Program Maturity Assessment




Reported in Closed Session Q2 & Q4

Measure Title: Composite Security Health Score within Range Executive Owner: Doug Hoffner Strategic Goal: Risk Management Strategic Objective: Continue to evolve Cyber Security program Associated Initiative(s): Information security roadmap

Status: Information to be provided in closed session Numeric Status: Information to be provided in closed session

Description: Information to be provided in closed session

Baseline: Information to be provided in closed session

Target: Information to be provided in closed session

Refresh Frequency: Information to be provided in closed session

Reporting Range: Information to be provided in closed session

Thresholds: Information to be provided in closed session Status Narrative: Information to be provided in closed session.



Measure Title: Effectiveness of Outreach Activities Executive Owner: Doug Hoffner Strategic Goal: Talent Management Strategic Objective: Recruit and empower a broad range of talents to meet organization priorities Associated Initiative(s): Talent outreach activities


Description: HRSD will continue expanding our outreach efforts to include diverse candidates in collaboration with CalPERS Diversity Outreach Program (CDOP), CalPERS Diversity & Inclusion Group (CDIG), CalPERS Disability Advisory Committee (CDAC), and community partnerships. This measure will implement data collection points to measure the effectiveness of outreach activities

Baseline: Baseline will be created during FY 2018-19 to establish data collection methodology and tools.

Target: To be determined after baseline is established.


Reporting Range: 07/01/18 – 06/30/19

Thresholds: On-Target: TBD At-Risk: TBD Off-Target: TBD

Status Narrative: Measure under development. Performance data will be available in August 2019.



Measure Title: Engagement survey results & action items – diversity & inclusion Executive Owner: Brad Pacheco Strategic Goal: Talent Management Strategic Objective: Recruit and empower a broad range of talents to meet organization priorities Associated Initiative(s): Expand diversity & inclusion program


Description: This measure focuses on our efforts to help foster a culture of inclusion that welcomes diversity of thought, experience, and background. We have learned that diversity within an inclusive working environment enhances the relevance of our work, increases productivity, and improves the value of services we provide. The annual Employee Engagement Survey has several specific questions aimed at gauging the success of our diversity and inclusion (D&I) efforts.

A survey score above 59% represents a high-performing organization.

Baseline: 66% (2017) D&I Driver Employee Engagement Survey results.

Target: Increase the Engagement Survey score average related to D&I by 1.6% Annually (8% by 2022).

Refresh Frequency: Annually, December

Reporting Range: October-September

Thresholds: On-Target: Annual increase of 1.6% or more At-Risk: Annual increase of 1-1.5% Off-Target: Annual increase of less than 1% or no increase

Status Narrative: As of December 2018, the D&I Driver Employee Engagement Survey was at 67.7%. This Measure was over the On-Target. Updated performance data will be available December 2019.



6667.7

74

2017 201860

70

80

90

100

D&I Survey Score %

Workforce Diversity & Inclusion




Measure Title: Engagement Survey Results & Action Items - Accountability Executive Owner: Doug Hoffner Strategic Goal: Talent Management Strategic Objective: Recruit and empower a broad range of talents to meet organization priorities Associated Initiative(s): Implement engagement survey action items


Description: This measure focuses on our annual employee engagement survey which supports our efforts to foster a culture of engagement at CalPERS. The questions in the survey correspond to engagement and retention drivers, such as manager relationships, learning and development, culture, and organization potential.

The Senior Leadership Council (SLC) received focus group feedback on Accountability – specifically recommendations for how to improve in this area.

Action plans are being developed to address the two lowest scoring drivers from the survey: Accountability and Senior & Executive Management Relationships. This measure will focus on the Accountability score

Baseline: Accountability: 52% as of December 2017.

Target: High performing status of > 59%


Reporting Range: November 2018 - October 2019

Thresholds: On-Target: Above 59% represents high performance At-Risk: 40-59% represents average performance Off-Target: Under 40% represents low performance

Status Narrative: As of December 2018, this measure reported at 62% and was On-Target. Updated performance data will be available December 2019.



52

62

2017 201840

50

60

Accountability Score %

Engagement Survey Results & Action Items - Accountability




Measure Title: Engagement Survey Results & Action Items – Senior & Executive Management Relationships

Executive Owner: Doug Hoffner Strategic Goal: Talent Management Strategic Objective: Recruit and empower a broad range of talents to meet organization priorities Associated Initiative(s): Implement engagement survey action items


Description: This measure focuses on our annual employee engagement survey which supports our efforts to foster a culture of engagement at CalPERS. The questions in the survey correspond to engagement and retention drivers, such as manager relationships, learning and development, culture, and organization potential.

The Senior Leadership Committee (SLC) received focus group feedback on Senior & Executive Management Relationships – specifically recommendations for how to improve in this area.

Action plans are being developed to address the two lowest scoring drivers from the survey: Accountability and Senior & Executive Management Relationships. This measure will focus on the Senior & Executive Management Relationships score.

Baseline: Senior & Executive Management Relationships: 54% as of December 2017

Target: High performing status of > 59%


Reporting Range: November 2018 - December 2019

Thresholds: On-Target: Above 59% represents high performance At-Risk: 40-59% represents average performance Off-Target: Under 40% represents low performance

Status Narrative: As of December 2018, this measure reported at 52% and was deemed “At-Risk” since it fell within the 40-59% threshold, indicating average performance. The executive team will continue holding leadership brown bag engagements quarterly for the remainder of FY 2018-19, and develop other activities aimed at improving the score for this measure. Updated performance data will be available December 2019.



54

52

2017 201840

50

60

Senior & Executive Management Score %

Engagement Survey Results & Action Items - Senior & Executive Management Relationships

Baseline At-Risk Target Trendline



Measure Title: Proficiency in CalPERS Leadership Competencies Executive Owner: Doug Hoffner Strategic Goal: Talent Management Strategic Objective: Recruit and empower a broad range of talents to meet organization priorities Associated Initiative(s): Develop leadership competencies measurement tool; Implement 2018-22 workforce

plan strategies; Enhance succession planning program & retention strategies for senior leaders


Description: Measure leaders’ proficiency in CalPERS’ Leadership Competencies to ensure leaders are modeling these competencies. Initial development of an automated system designed to measure leaders’ proficiency in the competencies has begun and is expected to be complete Quarter 1 of FY 2019-20.

Baseline: Will be established after end of year calibration for FY 2018-19.

Target: To be determined. Contingent upon baseline, will be established by September 2019.

Refresh Frequency: Annually, September

Reporting Range: 07/01/18 – 06/30/19

Thresholds: On-Target: TBD At-Risk: TBD Off-Target: TBD

Status Narrative: Measure under development. Performance data will be available September 2019.


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